State’s cut in gas emissions expands housing costs

California’s attempts to reduce natural gas emissions indicate price increase in building construction, leading to potential influx in housing costs

SACRAMENTO, CALIF. – A two-year old building code update is taking effect in 2023 to decrease carbon emissions in the state, but exhibits an uptick in the cost of construction.

Starting on Jan. 1, houses and buildings must be constructed in accordance with a new building code that will eventually remove gas powered appliances from the construction process. This includes utilities like stoves, water heaters and furnaces. However, the updated code does not eliminate the installation of gas amenities completely. It only enforces that residential homes and buildings must be built in preparation for electrical appliances to be added, which raises cost in certain housing aspects, according to city of Visalia senior plans examiner, Val Garcia.

“The code is setting us up so that we, in the future, [are able] to go all electric,” Garcia said. “We’re kind of in a transition phase where you can still set up for gas, but by doing so, you also have to provide the stuff for electric; so if a person chooses, they can go all electric, it’s just not a mandate that they only go electric [with this change].”

With this change, Garcia said staff with the city’s building department estimate a $10,000 to $15,000 increase in future housing and building construction. Since electrical infrastructure is being added along with the materials for gas appliances, there are additional costs associated with this installment. He said it all varies on the size of the homes and amenities put into them, so overall, the raise to construction costs could start as low as $500 or climb to the estimated $15,000.

Although nothing is set in stone, Garcia said there is potential for an increase to housing prices since developers will have to accommodate the ordinance. As for electricity prices, Garcia said power in the state could become more pricey, which could have a larger impact on certain groups who may not be able to afford it, like communities in the Central Valley. In this circumstance, he said people may have to make some changes in the power usage of their day-to-day lifestyles to accommodate future electricity prices.

 In regards to the overall benefits and challenges that could come with the code change, Garcia said it’s still too early in the process to determine those outcomes.

“Once we get going in the new code, there may be some things that we run across that we may not realize,” Garcia said. 

This change was made to the state’s energy code in 2021, following approval from the California Energy Board and Building Standards Commissions. As 2023 draws near and signifies the initial enactment of the code change, developers and contractors are seizing the opportunity to submit their building plans under the current code ordinance in order to avoid any extensions to the approval process for building permits. However, according to Garcia, this is an outcome that comes with every change to ordinances as they are handed down by the state. 

In addition to accommodating electrical applications for homes, Garcia said builders must also install the infrastructure for power walls. A power wall is a rechargeable, lithium-ion battery station, which stores electricity for things like solar self-consumption and backup power. Additionally, solar panels must be added to all future residential homes and the infrastructure for electric vehicle charging stations must be supplied for future installation.

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